June online retail growth remains negative, but freefall eases slightly

• UK online sales were down -2.3% Year-on-Year (YoY) in June
• This represents the highest result the Index has seen in 2022 – and a significant climb against the 3- (-7%), 6- (-16.8%) and 12-month (-18.8%) averages
• Month-on-Month (MoM) the market reported +1.5% sales growth against May, but this fell short of the 2–5% that is typical for this time of year
• Average Basket Value (ABV) dropped slightly for the first time in five months, from £150 to £145, suggesting a degree of stabilisation

Elsewhere, after rising rapidly since January, the Average Basket Value (ABV) seems to have stabilised for the first time this year – dropping from last month’s peak of £150 back to £145. This is still very high historically, suggesting that consumers continue to prioritise quality over quantity with their purchases.

At a category level, the trends seen throughout H1 continue to dominate, with all categories reporting negative growth aside from clothing. Looking at the Year-to-Date (YTD – measuring Jan-Jun 2022 YoY growth against Jan-Jun 2021) graph below, we can see the extent to which category growth has been negative in 2022. The total market is down -16.7% in H1, with categories such as gardening and homeware plummeting over -30%. Meanwhile, clothing continues to recover from the pandemic at +4% YTD and +11.3% YoY, perhaps buoyed by the uptick in in-person events and summer travel.

Andy Mulcahy, Strategy and Insight Director, IMRG: “It speaks volumes that a decline of -2.3% feels quite good in the context of 2022. The cost-of-living crisis is having a profound impact on customer behaviour in ways that set it apart from the pandemic. For example, while the pandemic drove massive growth online, it didn’t change things like average spend or conversion. If we compare a lockdown period (Q4 2020) with a non-lockdown period (Q4 2021), the differences in some metrics are negligible – the percentage of visitors who view a product page on retail sites fell -3.5%, while the percentage that add something to their basket and proceed to the checkout fell -4.5%. Comparing Q1 2021 with Q1 2022, as the cost-of-living increases started to bite, those falls are -12% and -22.7% respectively. In some respects, incredibly, it is having a bigger impact.”

Jeremy Wilson, Director of Commerce, Customer Transformation & frog Tech at Capgemini: “Though the headline numbers indicate some continued impact of COVID-19 – as the categories that did well during that time fall back and those that didn’t pick up – a deeper dive into the wider trends does show that the cost-of-living crisis is having a very different effect on consumer behaviours. Boiled back, the pandemic mainly drove a channel switch – changing where budget was spent, but not necessarily how much and how often. The conversion drops and basket value increases we’re seeing now appear to show that the cost-of-living crisis is having a far greater impact on consumers’ spending caution and prioritisation of goods. It will be interesting to track these numbers over the coming months, particularly as energy costs soar ever higher.”

About the ‘IMRG Capgemini Online Retail Index’

The IMRG Capgemini Online Retail Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location. 

About IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of online retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry. We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indices provide in-depth intelligence on online sales, mobile sales, delivery trends and over 80 additional KPIs. Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally. 

About Capgemini

Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology. The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organisation of over 340,000 team members in more than 50 countries. With its strong 55-year heritage and deep industry expertise, Capgemini is trusted by its clients to address the entire breadth of their business needs, from strategy and design to operations, fuelled by the fast evolving and innovative world of cloud, data, AI, connectivity, software, digital engineering and platforms. The Group reported in 2021 global revenues of €18 billion.

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